Progressive Liberal Party’s (PLP) Leader Philip Davis said the Ministry of Finance has failed the Bahamian people with its 67 per cent increase in value added tax (VAT) introduced during the tabling of the 2018/2019 Budget Communication in the House of Assembly (HOA) Wednesday.
“The Ministry of Finance has failed. The 2018/2019 Budget Communication provides ample evidence of its failure,” Davis said in a statement.
Pointing out that various government agencies have been underperforming for some time, whilst still receiving monies for their department, the opposition leader indicated that, “the key agencies of the Ministry of Finance, Customs and the Department of Inland Revenue, are not performing, notwithstanding strong economic growth and the tens of millions invested in these agencies by the previous administration.”
Davis said he believes it is all as a result of governments stop, review and cancel policy.
He said the government is desperately seeking to restart programs designed by the very sensible policies put in place by the previous administration.
“The reason is simple,” Davis said.
The opposition leader rationalized that the Free National Movement (FNM) can “re-energize the reform and modernization exercises that have been launched in respect of the major tax areas, such as Customs and Real Property Tax,” Davis recommended.
Further, Davis pointed out that government must re-energize the reform and modernization because of reckless and short-sighted actions.
According to Davis, this re-energizing and modernization would take time before any tangible results are seen, as such, he said the “tax spiral” which has now commenced in 2018/2019 Budget Communication, will continue as the government attempts to achieve the overly ambitious targets set out in the draft Fiscal Responsibility Act.
Moreover, Davis insisted that the signs of failure are littered throughout the communication.
“For example, in the Customs Department, notwithstanding the currently implemented IDB funded Trade Sector Reform, the Minister of Finance is insisting on another review of customs procedures,” he said.
“A full management audit of Customs procedures and processes will be undertaken to determine the extent to which they deviate from international best practice and the best way forward to close the gaps that are identified.
“Why is this necessary?”